TLDR

Table of Contents

Core Scientific posted $580M Q1 profit but missed revenue estimates of $79.5M
Revenue declined from $179.3M in Q1 2024, partly due to Bitcoin halving
Company is shifting focus to high-performance computing (HPC) for AI with $1.2B CoreWeave deal
Expects $360M annualized colocation revenue by 2026
Strong liquidity position with $778.6M in cash and digital assets

Core Scientific, a leading Bitcoin mining company, reported a substantial net profit of $580.7 million for the first quarter of 2025, more than doubling the $210.7 million from the same period last year. However, the Nasdaq-listed firm missed analyst revenue expectations, reporting $79.5 million in total revenue compared to $179.3 million in Q1 2024.

The company’s profit surge came primarily from a non-cash mark-to-market adjustment of $621.5 million in the value of warrants and other contingent value rights, resulting from the decrease in Core Scientific’s share price during the quarter. This accounting adjustment helped offset the revenue decline.

Core Scientific has announced its First Quarter 2025 Results!
– On track to deliver 250MW of billable capacity to CoreWeave by the end of this year and anticipate entering 2026 with annualized colocation revenue of approximately $360 million.
– First tranche of 8MW of billable… pic.twitter.com/cHt5xSA74Y
— Core Scientific (@Core_Scientific) May 7, 2025

Core Scientific’s main revenue sources included $67.2 million from self-mining operations, $3.8 million from hosted mining, and $8.6 million from colocation services, previously listed as high-performance computing (HPC) hosting.

Strategic Shift to AI Computing

The company attributes its revenue decline to two main factors: the Bitcoin halving event in April 2024, which cut mining rewards from 6.25 BTC to 3.125 BTC, and its strategic shift toward high-performance computing for artificial intelligence applications.

CEO Adam Sullivan described the quarter as an “inflection point” for the company. “In a matter of months, we have transformed vision into execution, delivering infrastructure at scale and positioning ourselves at the center of one of the most important shifts in modern computing,” Sullivan stated.

In February, Core Scientific partnered with AI startup CoreWeave for a $1.2 billion data center expansion. The company is on track to deliver 250MW of billable capacity to CoreWeave by the end of 2025.

The first 8MW of billable capacity at their Denton facility will be delivered to CoreWeave by the end of May, with approximately 40MW more expected by the end of the current quarter. With this expansion, Core Scientific anticipates entering 2026 with annualized colocation revenue of approximately $360 million.

Financial Position and Market Response

Despite the revenue miss, Core Scientific maintains a strong liquidity position with $778.6 million in cash, cash equivalents, and digital assets. This provides financial flexibility to pursue both organic and inorganic growth opportunities as the company transitions more of its operations toward AI computing.

Core Scientific’s stock (CORZ) closed regular trading on May 7 down 1% at $8.90 but jumped over 3% to $9.24 in after-hours trading following the earnings release.

The company’s digital asset self-mining gross profit for Q1 2025 was $6.0 million (9% gross margin), compared to $68.4 million (46% gross margin) for the same period last year. This decrease was partially offset by a 74% increase in the average price of Bitcoin and a 33% decrease in power costs due to lower rates and usage.

Digital asset hosted mining gross profit was $1.7 million (46% gross margin), down from $9.3 million (32% gross margin) in Q1 2024. Colocation gross profit was $0.5 million (5% gross margin).

Selling, general and administrative expenses increased to $40.1 million from $16.9 million in the prior year, primarily due to higher stock-based compensation, non-capitalizable colocation site startup costs, and increased personnel expenses related to the company’s transition to colocation operations.

The company reported an operating loss of $42.6 million, compared to an operating income of $55.2 million for the same period in 2024. Adjusted EBITDA was negative $6.1 million, compared to positive $88.0 million for Q1 2024.

Core Scientific is among several Bitcoin mining companies pivoting toward AI and high-performance computing. Industry peers like Riot Platforms, Hive Digital, Hut 8, Iris Energy, and TeraWulf have all made similar moves to convert part of their operations to support AI infrastructure.

Core Scientific will host a conference call with CEO Adam Sullivan, CFO Jim Nygaard, and VP of Investor Relations Jon Charbonneau to discuss the quarterly results in more detail.

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